Almost half of the Eurozone countries, 9 out of 18 have double-digit inflation
By Chrysostomos Tsoufis
The budgets of households and businesses are crushed by the “tracks” of the inflation tank that sweeps everything in its path. Inflation set a new historical record in Eurozone with jump to 8.6%.
It jumped to 12% in Greece , which in June shows the 5th highest inflation in the Eurozone behind Estonia, Lithuania, Latvia and Slovakia. Greece in June had the 2nd largest monthly increase in the entire Eurozone behind only Estonia. Almost half of the Eurozone countries, 9 out of 18 have double-digit inflation.
The inflation fire is maintained by energy where inflation again exceeded 40% after a break of 2 months, with 41.9% (in March it was at 44.3%). Particularly worrying, however, are the data on food inflation, which is now in double digits at 11.1% and services, which remains stuck around 3.5%, at 3.4%.
Following these figures It is certain that the pressure on the ECB which has announced interest rate hikes in July is intensifying. According to the data so far, an increase of 0.25% and another equal increase is expected in September, ending the season of negative interest rates. The balance, however, is very delicate as high interest rates hit growth which is already weak.
In addition, the tightening of monetary policy by Frankfurt is causing turmoil in the bond markets, with the ECB also committed to creating a tool that will prevent debt market fragmentation. Until the announcement of the new mechanism and according to Reuters, the ECB even today may set up a protection umbrella by buying bonds from Italy, Spain, Portugal and Greece, with part of the proceeds from the maturity of German, French and Dutch debt, in a trying to reduce the differences between their borrowing costs.
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